SAIC-GM's sales fell back to 9 years ago after 4 consecutive years of idle net profit of 500,000 vehicles

Yangtze River Business Daily reporter Xu Jia

SAIC-GM mastered the "traffic password" Gu Ailing, but lost the company's "sales password".

Recently, SAIC Motor (600104.SH) released data showing that SAIC-GM's sales reached 110,000 units in January, down 15.43% year-on-year. The reporter of Changjiang Business Daily found that this is the 10th consecutive month of year-on-year decline in SAIC-GM sales.

Looking at historical data, SAIC-GM sold 2.0002 million vehicles in 2017, which is the first and only time that the company's sales have exceeded the 2 million vehicle mark, and it has also become a "watershed". Over the next four years, the company's sales declined.

Moreover, in 2021, SAIC-GM's sales volume was 1.3316 million units, down 9.26% year-on-year, falling back to nine years ago, comparable to 1.3927 million units sold in 2012.

At present, SAIC-GM has a production capacity of 1.908 million units and will produce 1.4099 million units in 2021, which also means that the company has about 500,000 units of production capacity in an idle state.

Not only that, SAIC-GM's profitability is also declining, in 2020 and the first half of 2021, the company's net profit attributable to the mother was 4.103 billion yuan and 2.348 billion yuan, respectively, even less than the "zero" of 26.616 billion yuan in 2013.

Sales declined for the 10th consecutive month year-on-year

Gu Ailing, who won two gold and one silver at the Beijing Winter Olympics, is the spokesperson of the Cadillac brand, but with the blessing of the Olympic champion, SAIC-GM did not "soar", but fell in a straight line.

In January, in the SAIC Group's production and sales express, the "full screen" was the increase in sales of various car companies, and the decline of SAIC-GM was particularly eye-catching.

In January 2022, SAIC motor sold 455,600 vehicles, an increase of 13.02% year-on-year. Among them, SAIC Volkswagen sold 130,600 units, an increase of 51.69% year-on-year; SAIC Motor passenger car sales of 67,600 units, an increase of 18.02%; SAIC-GM-Wuling sold 110,100 units, an increase of 18.01% year-on-year.

Among the three overseas bases, SAIC Chia Tai Co., Ltd., SAIC-GM-Wuling Motors Indonesia Co., Ltd. and MG Motors India Co., Ltd. sold 3,877 units, 2,508 units and 4,488 units respectively in January, up 47.7%, 182.43% and 26.85% year-on-year, respectively.

Saic Motor Maxus Automobile Co., Ltd. also sold 21,000 units in January, up 25.2% y/y.

SAIC-GM-Wuling, SAIC-GM and SAIC Volkswagen are the guarantee of SAIC-GM's sales and are known as the "troika".

However, SAIC-GM sold 110,000 vehicles in January, down 15.43% year-on-year. The reporter of Changjiang Business Daily found that this is the 10th consecutive month of year-on-year decline in SAIC-GM sales.

In the entire production and sales report of SAIC Group in January, except for the "other" category (including Shanghai Shenwo Bus Co., Ltd., SAIC Hongyan Automobile Co., Ltd., Nanjing Iveco Automobile Co., Ltd.), the sales volume was only 5407 units, down 56.88% year-on-year, and only SAIC-GM's sales were declining.

Of course, if SAIC-GM treats "other" car companies as pads, it can only be said to be "willing to degenerate".

In fact, SAIC-GM once had a glorious history.

SAIC-GM Co., Ltd. was established on June 12, 1997, jointly funded by SAIC Motor Group Co., Ltd. and General Motors, which also announced SAIC-GM's official entry into the Chinese market.

In 2010, China's total auto sales exceeded 18 million units. This year, SAIC-GM has sold more than 1 million vehicles, and has become the first traditional passenger car company in the history of China's automobile industry to jump annual production and sales to the "million-level".

Three years of sales exceeded one million, which is undoubtedly a miracle. Since then, although the company's sales have fluctuated slightly, they have generally maintained an upward trend.

From 2011 to 2016, SAIC-GM sold 1,231,000 units, 1,392,700 units, 1,575,200 units, 1,760,200 units, 1,752,000 units, and 1,887,000 units, respectively.

However, the Yangtze River Business Daily reporter found that 2017 became a "watershed" for SAIC-GM, with sales of 2.0002 million vehicles that year, which was the first and only time that the company's sales exceeded the 2 million vehicle mark.

How high you stand, how badly you fall. Subsequently, SAIC-GM's sales continued to decline for four consecutive years, with 1.9701 million units, 1.6 million units, 1.4675 million units and 1.3316 million units sold from 2018 to 2021, respectively, up -1.50%, -18.78%, -8.29% and -9.26% year-on-year, respectively.

In 2012, SAIC-GM sold 1.3927 million units, which also means that its full-year sales in 2021 fell back to nine years ago.

A landmark event in SAIC-GM's sales decline was the company's announcement in September 2018 that it was recalling 3,326,700 Buick, Chevrolet and Cadillac brand vehicles.

The number of single recalls by SAIC-GM can be described as "unprecedented", and it has not been directly surpassed.

In fact, the problems of SAIC-GM's recall of cars have been complained about 5 years ago, and this recall is because the supervision department has carried out defect investigations, that is, "passive recalls".

Capacity utilization rate reduced to nearly 74%

Sales continued to decline, and SAIC-GM's production capacity began to sit idle in large quantities.

At present, SAIC-GM has four production bases in Pudong Jinqiao, Yantai Dongyue, Shenyang Beisheng and Wuhan Branch, three brands of Buick, Chevrolet and Cadillac, and more than 30 series of product lineups, covering gradient markets from high-end luxury cars to economy cars, as well as market segments such as MPVs, SUVs, hybrids and electric vehicles.

According to the available data, in 2015 and 2016, SAIC-GM's design capacity was 1.51 million units and 1.668 million units, respectively, and the actual production capacity was 1.7 million units and 1.876 million units, respectively, and the capacity utilization rate was 113% and 112%, respectively.

Obviously, SAIC-GM's capacity increase and sales increase are almost synchronized, and production capacity is still insufficient.

In 2017, SAIC-GM increased its production capacity to 1.908 million units, and has not expanded production since then.

In 2017 and 2018, SAIC-GM's actual production capacity was 2.006 million units and 1.96 million units, respectively, and the capacity utilization rate was 105% and 103% respectively, which can still achieve "full production and full sales".

However, in 2019 and 2020, SAIC-GM's actual production capacity was 1.617 million units and 1.41 million units, respectively, and the capacity utilization rate was 85% and 74%, respectively.

In 2021, SAIC-GM will produce 1.4099 million units, and if calculated on this basis, the capacity utilization rate this year is nearly 74%, and about 500,000 units of production capacity is idle.

In November 2019, Wang Yongqing, general manager of SAIC-GM, publicly stated that in the Chinese market, SAIC-GM will always be in the first camp. Shi Hong, deputy general manager of SAIC-GM, added: "We can't lose. ”

The phrase "it is impossible to lose" by SAIC-GM executives reflects self-confidence, but from the current point of view, it will be somewhat "blind".

As the "profit cow" of SAIC Group, saicid motor GM will inevitably perform poorly under the poor sales volume.

According to the available data, in 2012, SAIC-GM's operating income reached 145.059 billion yuan and net profit attributable to the mother reached 17.546 billion yuan.

Since then, from 2013 to 2016, SAIC-GM's operating income was 145.7 billion yuan, 167.335 billion yuan, 177.703 billion yuan and 202.959 billion yuan, and the net profit attributable to the mother was 26.616 billion yuan, 14.786 billion yuan, 16.567 billion yuan and 16.948 billion yuan, respectively.

2017 was the best year for SAIC-GM's sales, and the company achieved operating income of 228.064 billion yuan, which is also the first in history, but the net profit attributable to the mother is not the most 15.421 billion yuan, not as good as the 26.616 billion yuan in 2013.

Moreover, from 2019 onwards, SAIC-GM's profits began to decline sharply.

From 2018 to 2020, SAIC-GM's operating income was 224.444 billion yuan, 187.821 billion yuan and 177.296 billion yuan, respectively, and the net profit attributable to the mother was 15.621 billion yuan, 10.958 billion yuan and 4.103 billion yuan, respectively.

In the first half of 2021, SAIC-GM's operating income reached 79.292 billion yuan and net profit attributable to the mother reached 2.348 billion yuan.

From this point of view, SAIC-GM's revenue capacity in 2021 is likely to decline again, and the net profit is only "zero" at its peak.

SAIC-GM is also changing demand. In April 2021, SAIC-GM announced its leading technology and strategic layout in the field of "electrification, intelligence and networking", and promised to invest more than 50 billion yuan in the field of electrification and intelligent networking new technologies by 2025.

The layout of the "three modernizations" is certainly correct, but at the moment when new energy vehicles are in charge, are there still more opportunities and time left for SAIC-GM?